Novelty Requirement for Granting Patent Right for Design

2008/2/1Liu Xiaojun,[Patent]

Article 23 of China's Patent Law states that "Any design for which patent right may be granted must not be identical with or similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and must not collide with any legal prior rights obtained by any other person".

In the Draft Revision of the Patent Law Submitted for Review (Draft Revision), this provision has been divided into three paragraphs. Paragraph 1 provides that, "No design for which patent right may be granted shall belong to prior designs, nor shall there be any identical or similar design that has, before the date of filing, been filed for patent by others with the administrative department for patent under the State Council and recorded in the patent document declared after the said date of filing. In addition, to an ordinary designer in the relevant field the design shall be substantially distinguishable from any prior design or a combination of the features of a prior design." Paragraph 3 thereof provides that, "In this Law, prior design refers to the one that has been publicly disclosed in publications in the country or abroad, or have been publicly used or made known to the public by any other means before the date of filing".

From the above paragraphs, it can be seen that great amendments have been made to the current Patent Law in the Draft Revision with respect to designs. The global novelty standard has been adopted in novelty granting requirements. This article will probe into the new provisions regarding the novelty requirements for granting patent right for design in the Draft Revision and advance some reasonable suggestions with regard to related issues.

I.  An Overview of Novelty Standard

For determining the novelty of design patents, there can be roughly three standards: absolute novelty standard, relative novelty standard and blended novelty standard. 

Absolute novelty standard, also called global novelty standard or worldwide novelty standard, means that the design under patent application must not be identical or similar to prior designs in the world. The merit of this standard is it guarantees that the patented design is a new design. Its disadvantage lies in the fact that it is hard to exhaust all prior designs when examining whether a design under patent application possesses novelty. It will cost patent-granting authorities a large amount of resources to collect and preserve prior designs. Currently most countries have not adopted the absolute novelty standard.

Relative novelty standard, also referred to as regional novelty standard, does not require that the design to be patented must not be identical with or similar to the prior designs of the whole world. Instead, it imposes such requirements for a certain region. Here "certain region" usually means a certain sovereign territory, such as a sovereign country or region. The advantage of this standard is that it brings convenience to patent-granting authorities in their novelty examination. The disadvantage is it cannot guarantee that the design to be patented is a new design worldwide, which may stimulate an applicant to file an application on a design that possesses novelty at home but has been publicly disclosed globally and consequently impair the rights and interests of foreign right holders and constitute patent barriers to free trade.

The blended novelty standard is a granting standard composed of absolute novelty and relative novelty. The primary way to destroy the novelty of a design under patent application is through public disclosure and public use. According to blended novelty standard, for publicly disclosed designs, the absolute novelty standard will apply; while for publicly used designs, the relative novelty standard will prevail. Presently China adopts the blended novelty standard. The blended novelty standard has its benefits in that it avoids in part the shortcomings of the other two standards. For example, it overcomes the heavy cost of absolute novelty standard and the over localized features of relative novelty standard. Likewise, blended novelty standard also partly inherits the deficiencies of the other two standards.

II. Continuance of Blended Novelty Standard in China

On the novelty of design patents, China's current Patent Law adopts a blended standard: Applied to publicly disclosed designs is the absolute standard, and applied to public use is the relative standard. However, the Draft Revision revised the blended novelty standard of the current Patent Law into an absolute novelty standard.

I have the opinion that on the standard of novelty for design patents, it is inappropriate to adopt the absolute standard and China should continue its adherence to the blended standard. The main reasons are as follows:

First, it conforms to the development track and actual needs of China's social economy

Since its emergence, the Chinese patent system over the last 20 years has witnessed a rapid development in design patents. Particularly since the revision of the Patent Law in 2000 the applications for design patents and the amount of grants in China have been on top of the world for five successive years. For example, in 2005, the number of applications for design patents reached more than 160,000 and over 80,000 design patents were granted. The development of design patent reflects the rapid changes of China's social economy. For the past 22 years since the implementation of the Patent Law, IPR awareness has been aroused and enhanced in the whole society, and more and more market players have come to realize the important status and role of IPR including design patents in market economy. They are bold in making explorations and innovations, constantly increasing their investment in R&D, actively filing applications for various patents including design patents, and continually taking and expanding their shares in the market by exploiting their patents. In this process, the blended novelty standard regarding design patents stimulated to a greater extent the initiatives of market players to file applications for design patents, promoted the development and innovation of enterprises, and at the same time guaranteed to a certain extent that the design for which patent right may be granted is a "new" design.

Second, it facilitates the grant and invalidation examination of design patents

Although the absolute novelty standard has more advantages in guaranteeing the design granted with patent right is a "new" design, it needs a special database that costs much. The relative novelty standard greatly lowers the requirements for innovation of designs and is disadvantageous to enterprises in their R&D and innovation activities. The blended novelty standard combines an absolute novelty standard for publications and relative novelty standard for public use. To a greater extent, it avoids the duplications and simulations of designs that have been publicly disclosed abroad, and promotes R&D investment and innovations of market players. It also saves granting and invalidation examination costs, and is advantageous to the construction of a special database for novelty examination. It meanwhile benefits the parties involved in producing relevant evidence, facilitates the cross-examination and authentication of relevant evidence in the granting and invalidation examination proceedings, and guarantees that the patented designs meet certain legal requirements.

Third, it is in line with international practices

Neither the Paris Convention nor TRIPs provides any specific standard for the novelty of design patents. In fact, it is within the discretion of each sovereign state to decide what standard to choose for this purpose. Every sovereign state that uses patent right for the protection of designs may choose an appropriate novelty standard based on its own development. Currently, only Japan and some EU members apply the absolute novelty standard while the rest of the world still take the blended novelty standard. For example, Article 102 (a) of the U.S. Patent Act provides: Loss of novelty means that the invention was known or used by others in this country, or patented or described in a printed publication at home or abroad, before the invention thereof by the applicant for patent1. Australia's Design Act which took effect after revision on June 17, 2004 provides: An industrial design is novel if the design filed for registration has not been used in this country or disclosed to the public anywhere in the world prior to the filing date of the application2.

Fourth, China can fulfill its international obligations with it

Article 5 (5) of the Paris Convention (Revised Edition (Stockholm, 1967)) simply provides that industrial designs shall be protected by all of its members. It does not provide the protective manners and conditions for designs "deserving protection". Part II of TRIPs "Standards Concerning the Availability, Scope and Use of Intellectual Property Rights" treats industrial designs and patents as independent types of IPR and offers patent protection to inventions in compliance with grant requirements. However in respect to designs, Article 25 of TRIPs merely provides: Members shall provide for the protection of independently created industrial designs that are new or original. Here the wording "new or original" means that the existence of either of the conditions will suffice for protection. TRIPs do not require that the "new" standard must be a global one. China's current Patent Law states that any design for which patent right may be granted must not be identical with or similar to any design that have been publicly disclosed in publications at home and abroad or have been publicly used in the country prior to the date of filing. That is, this provision protects "new" industrial designs with the standard of TRIPs.

Fifth, it has realistic significance in practices.

Some believe that with the furthering of economic globalization and the rapid development of science and technology, particularly of Internet-related technology, the distinction between publications and non-publications has become increasingly blurred. It is impractical and inoperable to restrict the prior art and design disclosed by non-publications within China's territory. It will discourage real inventions and innovations to allow the arts that have been known by the public through public use and public sale abroad to be patented in China; it will impair the legitimate rights and interests of the Chinese public to allow the prior arts and prior designs subject to public free use abroad to enjoy the exclusive right of patent in China3.

I believe that this perception is not well-grounded. First, publications and non-publications have seemingly vague distinctions but have not merged completely. Actually they are still distinguishable from each other. Second, not all designs that have been publicly used or publicly sold abroad can get access to patent right for design in China. This is because certain requirements must be satisfied before a design patent is obtained and through publication and other means a considerable number of designs that have been used or sold publicly abroad are made available to the public. Third, even if some designs that have been used or sold publicly abroad are patented in China, it is not necessarily disadvantageous to the encouragement of innovation, nor does it necessarily impair the rights and interests of the public in China. In fact, timely introduction of designs that have been publicly used or publicly sold abroad, particularly those that will not come into China's market within a short term, will encourage innovation and stimulate such products to come into China's market and meet the needs of the Chinese consumers.

To sum up, the blended novelty standard is still the mainstream standard for examining the novelty of design patents. It has been proven in practice that this standard conforms to relevant practices in the design patents of China. In the third revision of Patent Law, the blended novelty standard, but not the absolute standard, should be adopted.

III. Comparison Objects in Novelty Examination

Article 23 of the Patent Law provides that the prior art reference used for examining the novelty of design patents must be designs. But in judicial practice, if a trademark design that has been previously disclosed or used by others is filed for design patent, the said prior trademark design may also be used as a prior art reference for examining the novelty of the design patent.

 In the case concerning design patent invalidation of "Bottle Label (1)"4, Mr. Xu filed a patent application for design of "Bottle Label (1)" on March 22, 2000 and was granted with patent right on Nov. 29, 2000. On Oct. 9, 2001, Beiersdorf Company (Beiersdorf) filed an invalidation claim to the Patent Reexamination Board (PRB) for patent invalidation alleging that prior to the filing date of the said design patent, similar designs had already been publicly disclosed in publications, and also have been publicly used in this country. Besides, the patented design in question was similar to the prior trademark registered by Beiersdorf and was in conflict with the lawful trademark obtained previously. Therefore, the patent in question failed to conform to Article 23 of the Patent Law and should be invalidated. Meanwhile, Beiersdorf submitted such evidence as a copy of the original trademark (No.1056540) registration certificate and a copy of the original trademark (No.1056540) declaration. Concluding that the evidence submitted by Beiersdorf failed to form a complete chain of evidence to sufficiently uphold the reason for the invalidation claim, PRB maintained in a decision the validity of the disputed patent. Not satisfied with the decision, Beiersdorf filed the lawsuit.

The court of first instance took the view that the physical product presented by Plaintiff Beiersdorf in the invalidation examination process failed to sufficiently prove the fact of prior use. The design in this case was a "bottle label" which had its specialty and was a two-dimensional design, and the cited trademark was graphics and a two-dimensional design, so there was something in common between the two. However, under Article 23 of the Patent Law, any design that has been publicly disclosed in publications at home or abroad is a prior design rather than a trademark or something else. Therefore, it lacked legal basis that the plaintiff compared the design patent in question with its trademark. The plaintiff's trademark cannot be admitted as evidence of prior use. The court of first instance rendered a judgment affirming the PRB decision. Dissatisfied, the plaintiff appealed.

The court of second instance held that industrial design is a new kind of design that has aesthetic qualities and is applied to the industry, which is made based on the shape, graphic pattern of a product, or their combination as well as the combination of color, shape and graphic pattern of a product. Trademark is the composition of words, graphics, alphabets, numerals, 3D signs and combination of colors or the composition of all the above elements. Judged from the different perspectives of patents and trademarks, some patterns may have different attributes. They can be treated either as trademarks or designs. In the present case, Beiersdorf proved with evidence that its registered trademark was publicized on April 21, 1997, which was earlier than the filing date of the patent in question. Beiersdorf also produced relevant evidence proving that the registered trademark was used on its bottle labels. PRB should make judgment on whether the design of the patent in this case was identical with or similar to the design registered as trademark by Beiersdorf. It was incorrect for PRB and the court of first instance to hold without careful study that design patents could not be compared with trademarks. The court of second instance in its ruling cancelled the first instance judgment and declared the PRB examination decision invalid.

Is there any breakthrough in the judgment of this case in respect of the restriction that prior art reference for novelty examination of design patents must be a design? There remain different perceptions on this issue. I think that it is appropriate to restrict the prior art reference for novelty examination of design patents to designs and this provision should be maintained in the third revision of the Patent Law. Though in the aforementioned case the trademark design that had been previously disclosed was treated as the prior art reference for examining the novelty of a design patent, the trademark used as bottle label in this case has been applied to concrete products. As a result, the plaintiff's trademark design "can be viewed either as a trademark or a design", and accordingly it in substance constitutes a prior design. Besides, the concrete product bearing the trademark is identical with the patented product in this case, so the plaintiff's registered trademark can be deemed as a previously used design. In conclusion, no breakthrough has ever been made in this case to the legislation and the opinions and practices adhered to for a long time by the judiciary in their practices, i.e., the prior art reference used for examining the novelty of design patents must be designs.

IV. Can Conflicting Applications Destroy the Novelty of Design Patent?

Conflicting application is a concept generally used in patent for invention and patent for utility model. In the novelty examination of a patent application for invention or utility model, should other applicants, prior to the filing date of the said patent application for invention or utility model, have filed an identical patent application on the same invention or utility model with the patent office, and make a disclosure after the said filing date (including the filing date), the novelty involved in the said patent application for invention or utility model is destroyed. Such a patent application that destroys novelty is called conflicting application or interfering application in the judgment of novelty. There also exist conflicting applications in the novelty examination of design patent, but there is no provision on conflicting applications in respect of designs in China's current Patent Law. In view of the fact that China adopts preliminary examination with regard to the granting of design patents, conflicting applications will possibly not affect the preliminary granting of design patents, i.e. a patent application for design and its conflicting application may both be approved. For such a circumstance, currently Article 9 of the Patent Law and Article 13 (1) of the Implementation Regulations of the Patent Law shall apply and the design patent granted for an application filed at a later date will be declared invalid.

In my opinion, the third revision of the Patent Law should expressly acknowledge the existence of conflicting applications in design patent applications and state that conflicting applications will destroy the novelty of design patents. Actually there have been such provisions in both the Draft Revision of the Patent Law for Soliciting Opinions and the Draft Revision of the Patent Law Submitted for Review that conflicting applications may exist in the case of design patents and may destroy the novelty of design patents.

Endnotes:

1. The Department of Treaty and Law of the State Intellectual Property Office (SIPO), The Special Research Report on the Third Revision of the Patent Law and the Implementing Regulations of the Patent Law (Volume 1), 1st ed., Intellectual Property Press, April, 2006, p.389.

2. The Department of Treaty and Law of the State Intellectual Property Office (SIPO), The Special Research Report on the Third Revision of the Patent Law and the Implementation Regulations of the Patent Law (Volume 1), 1st ed., Intellectual Property Press, April, 2006, p.389 and p.402.

3. Explanations on the Draft Revision of the Patent Law of the People Republic of China (Review Draft), pp.12-13.

4. The case of Beiersdorf Co., Ltd. v. the Patent Reexamination Board on design patent invalidation dispute, see No.124 (2004) Administrative Judgment by Beijing No.1 Intermediate People's Court and No.199 (2005) Administrative Judgment by Beijing High People's Court.

About the author:

Liu Xiaojun is a judge from the IP Tribunal of Beijing High People's Court.
 
                                                                               (Translated by Zhang Meichang)

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